Conflicts: The Basics - What Is a Conflict of Interest? continued

A lawyer may have a personal interest or economic interest (other than payment of reasonable fees) that conflicts with the client’s interest and impacts the lawyer’s ability to provide unbiased counsel. Each of the personal interest examples below may render your insurance void – see Exclusion 6 of the B.C. Lawyers' Compulsory Professional Liability Insurance Policy. Examples:

  • You own 15% of the shares of a privately held company. Your client intends to purchase the company and take it public, and wants you to paper the deal.
  • Your client wants to invest in your spouse’s free-range llama farm and asks you to help negotiate the deal.
  • Your long-term client is having financial difficulties and you decide to loan him money to see him through a rough spot.

In addition to harming your reputation, engaging in a conflict of interest can:

  • lead to an investigation and regulatory sanction by the LSBC;
  • lead to civil liability for malpractice (even absent liability, defending such a claim takes time and costs money); and
  • in a court or tribunal matter, lead to being removed as the solicitor of record by the court or tribunal.

Community Discussion

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It is not unheard-of for a long term client to become a friend as well, and it is hard to explain to them why you cannot help them if they ask for a loan as your friend - "I can't do it because I am also your lawyer" can elicit the response "but this has nothing at all to do with your being my lawyer".  A great deal of tact is needed in such circumstances.  .